What it is
Average Daily Rate (ADR) measures the average price a host receives for each night a unit is booked during a specific period. In short-term rental (STR) terms it focuses on nightly revenue only — typically excluding one-time fees like cleaning or refundable security deposits unless you choose to include them in your calculation.
How it works
Calculate ADR by dividing total room-night revenue by the number of nights sold in the period: ADR = Total Nightly Revenue / Nights Sold. Total nightly revenue means the sums paid for nights (base price, extra-guest fees, per-night surcharges) but usually not guest service fees, taxes, or separate cleaning fees unless you intentionally add them. Run this for a week, month, quarter, or rolling 12 months to compare periods.
Why it matters to hosts
ADR lets you track how your nightly pricing performs independent of occupancy. Use ADR to: compare listings (or rooms) with different occupancy levels, evaluate the effect of price changes and discounts, and feed into other metrics like Revenue per Available Room (RevPAR) when combined with occupancy rate. For multi-listing portfolios, ADR helps standardize performance across different property types.
Common misconceptions and gotchas
- ADR is not the same as total revenue. ADR ignores nights that aren’t sold; it’s an average of nights that were sold. That makes it different from metrics that consider availability.
- Cleaning fees, refundable deposits, and some platform fees are often excluded. Because OTAs display base price vs total price differently, guests may perceive value differently from ADR-based analysis.
- Discounts (weekly/monthly), length-of-stay reductions, and extra-guest charges change ADR. Heavy discounting or a few expensive bookings can skew ADR up or down.
- ADR should be used with occupancy rate and RevPAR to get a full picture. A high ADR with very low occupancy may hurt revenue compared with a lower ADR and higher occupancy.
Track ADR regularly and align its definition (which fees are included) across your reports so comparisons are accurate.